Bureau of Labor Statistics data shows food prices have spiked by 2.9 percent since last July, and wholesale prices on fresh and dry vegetables increased by nearly 40 percent last month — the biggest increase in the last three years. And rising prices are likely to continue. Why? Donald Trump‘s tariffs.
Producers are already seeing rising costs. The Labor Department’s producer price index, a measure of inflation on wholesale goods and producer costs, increased by nearly one percentage point from June to July. Wholesale prices are up by 3.3 percent over last July. These numbers were significantly higher than economists predicted.
The data “points to pipeline inflation that’s likely to spill into consumer prices in the months ahead,” Michelle Green, a former Labor Department economist currently working at corporate planning firm Board, told Axios.
According to the Consumer Price Index, prices for consumers have already risen on several foods. Prices have increased by 5.8 percent on meat, 3.1 percent on poultry, 16.4 percent on eggs, and 14.5 percent on coffee.
“Keep in mind, certain foods like coffee, cocoa that’s used in chocolate, we can’t grow these here, so we’re going to be faced with higher prices or changing what we drink,” food trends expert Phil Lempert told WPTV West Palm Beach.
Prices will likely increase on other foods as well. While for now, it seems some companies are eating the cost of tariffs, they won’t be able to hold off forever on pushing those rising costs to consumers.
“It will only be a matter of time before producers pass their higher tariff-related costs onto the backs of inflation-weary consumers,” Christopher Rupkey, chief economist at financial markets research firm fwdbonds told PBS.
These rising prices will not just be limited to foods. Home electronic prices, for example, rose 5 percent in July as compared to June. Core consumer prices overall increased from 2.9 percent in June to 3.1 percent in July, far above the Federal Reserve’s goal of 2 percent.
Trump has also fired the head of the Labor Department’s Bureau of Labor Statistics, which produces the Consumer Price Index because he didn’t like the July jobs numbers, potentially putting into question future reports by the bureau.
As wholesale and consumer prices have risen, so has the demand on food banks, which were already hit hard with shortages due to federal budget cuts earlier this year and actions at the so-called Department of Government Efficiency. The “One Big Beautiful Bill” congressional Republicans passed last month also cut Supplemental Nutrition Assistance Program (SNAP) benefits by $186 billion, meaning more people may be turning to increasingly strapped food banks to make up for the loss in food assistance.
